S&P dips DTEK Renewables

S&P said it lowered its ratings for DTEK Renewables BV and its senior unsecured debt to CCC- from CCC.

“DTEK's Renewables' solar assets continue to generate electricity, but cash collection remains very low. The wind and solar assets (around 950 megawatts [MW]) are in southern Ukraine. The company's wind farms are no longer operational as the grid to which they were connected to has been damaged and repair is not possible due to the conflict, except for three wind turbines from DTEK Tiligulskaya, which became operational at the beginning of May. However, we understand that despite the assets' location, they were not damaged,” the agency said in a press release.

S&P noted DTEK Renewables’ production has plunged by 70% since Russia’s invasion.

“DTEK Renewables continues to service its debt, but if cash collection does not improve, we cannot rule out a default because it will experience a material liquidity shortfall. On May 9, 2022, the company received consent from bondholders to use the debt service reserve (DSR) account to pay the interest (around €14 million) in its only senior unsecured bond issued back in 2019 (€325 million 8˝% notes due 2024). The company also used the DSR to pay the interest and principal repayments on its remaining bank debt,” the agency said.

The ratings remain on CreditWatch with negative implications.

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